The Case For Liberating Oil Exports
Imagine this: US iron miners, thanks to revolutionary technology that can extract iron from once-useless rock, double their production in 5 years, creating hundreds of billions of dollars of wealth, contributing to steel production for billions of people around the world, and making America a world leader in iron once again.
The production explosion is so big that domestic steel mills can’t keep up, but that needn’t be a problem. There are plenty of international steel mills that will buy US iron and make it into steel that we or anyone else in the world can buy—at ever-lower prices, thanks to the growing supply of iron and steel on the market.
What if, instead of liberating this beneficent combination of domestic production and international trade, the government xenophobically insisted on banning the export of iron—“crude steel”—even though every other industry, including steelmakers, is (properly) allowed to sell the products it produces to buyers around the world?
Here’s what would happen.
Deprived of an international market, iron makers would have to sell their product at artificially low prices to only domestic steelmakers, who would make an artificially inflated profit. Iron makers would lower their production because iron would be less profitable, and there would be mass layoffs where there could have been mass job-creation. With less iron in the world, there would be less steel in the world and higher prices for everyone. The US’s opportunity to be the world leader in iron would be threatened.
Fortunately, there is no proposal to ban “crude steel” sales. But appallingly, there is a four-decade official policy of banning the international sale of an even more vital commodity: crude oil, or petroleum.
Original Article: http://onforb.es/1NYhVRo